Yes, you can sell a house with a reverse mortgage after your parent passes away, and for most Texas families that's exactly how the loan gets settled. When the last borrower dies, the reverse mortgage comes due. The house is sold, the title company pays the servicer out of the proceeds, and whatever is left goes to the estate or the heirs. And if the house is worth less than the loan balance, the heirs generally don't have to make up the difference out of their own pockets.
The part that catches families off guard is the clock. The servicer will want to hear from you fairly quickly, and any extra time depends on showing you're actively working on a sale or a payoff. This guide walks through that timeline, what the family actually owes, and how to keep things from sliding toward foreclosure.
One quick note before we start: this is general information, not legal advice. Reverse mortgage rules depend on the type of loan, and a Texas probate attorney or a HUD-approved housing counselor can tell you exactly where your family stands.
The short answer
Most reverse mortgages in Texas are Home Equity Conversion Mortgages, or HECMs, which are insured by the FHA. With a HECM, your parent didn't make monthly payments. Instead, the loan balance grew over time, and the deal was that it would be paid back when the last borrower died, sold the house, or moved out for good.
So when that day comes, the family has a few choices:
- Sell the house and pay off the loan from the proceeds. Any equity left over belongs to the estate or the heirs.
- Keep the house by paying off the loan, usually with cash or a new mortgage in an heir's name.
- Hand the house back to the lender through a deed in lieu of foreclosure, if there's no equity worth saving.
Doing nothing is also a choice, and it's the one that ends in foreclosure. That's the outcome worth avoiding.
How the reverse mortgage timeline works after a death
Every servicer handles the details a little differently, but the general flow for a HECM looks like this.
Step 1: The servicer learns about the death
Sometimes the family calls, and sometimes the servicer finds out on its own. Either way, it's better to call early, tell them who's handling the estate, and ask what paperwork they want. A copy of the death certificate is usually first on the list.
Step 2: The loan is called due
Once the servicer confirms the last borrower has passed, it sends a due and payable notice. From there, heirs generally have about 30 days to tell the servicer what they plan to do: sell, pay off the loan, or turn the house over. You don't need everything figured out in 30 days. You just need to answer and say what direction you're heading.
Step 3: Time to sell or pay off
After that first response, HUD's rules generally give the family about 6 months from the date of death to sell the house or pay off the loan. The servicer can get up to two 90-day extensions approved when you can show real progress, like a listing agreement, a purchase contract, a loan application, or a probate filing. That can stretch things to about a year, but extensions aren't guaranteed. Send updates without being asked. A servicer that hears nothing tends to assume nothing is happening.
Step 4: Foreclosure if nothing gets settled
If the deadlines pass without a sale, a payoff, or an approved extension, the servicer can move toward foreclosure. In Texas that process moves quickly once it starts, as our guide to selling a house in foreclosure explains. A sale can still close right up until the auction, but it's a lot less stressful to get there well ahead of time.
What the family actually owes
This is where a lot of the worry comes from, so let's take it slowly.
The amount due is the full loan balance: everything your parent received, plus interest and mortgage insurance premiums that built up over the years. On a loan that's been running a long time, that number can be bigger than the family expects. Ask the servicer for a written payoff statement early so nobody is guessing.
Here's the reassuring part. HECMs are non-recourse loans. The loan is tied to the house, not to the heirs personally. If the house sells for less than the loan balance, FHA insurance covers the shortfall, and the servicer can't come after the kids' savings for the rest.
There's also a rule that helps when the house is underwater. Under HUD's HECM rules, the family can sell the house for at least 95 percent of its current appraised value, and the servicer accepts the sale proceeds as payment in full, even if the balance is higher. The servicer will usually order its own appraisal to set that number. If an heir wants to keep the house instead, ask the servicer in writing what payoff it will accept, and don't assume the 95 percent rule applies.
One caution: not every reverse mortgage is a HECM. Some are private loans, sometimes called proprietary reverse mortgages, and their terms on deadlines and payoff amounts can be different. If you're not sure which kind your parent had, the loan documents or the servicer can tell you.
What if a spouse is still living in the house?
If your parent was married and their spouse wasn't on the loan, the spouse may be able to keep living there. HUD has protections for what it calls an eligible non-borrowing spouse, which can delay the loan coming due as long as certain conditions are met, like keeping up with property taxes and insurance and living in the house as a primary residence. Whether a spouse qualifies depends on when the loan was made and what the paperwork says, so call the servicer and a housing counselor before anyone plans a sale.
Who has the authority to sell?
A reverse mortgage doesn't change the basic Texas rule: somebody has to have legal authority to sign the deed. If the house was in your parent's name alone, that usually means an executor or administrator appointed by the probate court, or heirs whose ownership has been cleared through a muniment of title or another route. Our plain-language guide to probate and selling a house in Texas explains each of those paths.
This matters for the reverse mortgage clock. Probate takes time, and the servicer's deadlines don't stop just because the court hasn't ruled yet. Filing promptly, and sending the servicer proof that you've filed, is one of the best ways to earn an extension. If several brothers and sisters inherit together, everyone will generally need to sign, so get on the same page early.
Things to keep up with while the house waits
A reverse mortgage comes with conditions that don't disappear when the borrower does. While the family sorts things out:
- Property taxes. They keep coming every year, and unpaid taxes cause trouble with the servicer and the title.
- Homeowners insurance. Keep the policy active, and tell the insurer if the house is vacant. Many policies treat an empty house differently.
- Basic upkeep. Mow, lock up, and keep an eye on the roof and plumbing.
- The servicer. Answer letters, log your calls, and get any extension in writing.
None of these stop a sale. They're what keep your options open.
How a cash sale fits a reverse mortgage deadline
A traditional listing can work well when there's time. But a house lived in for decades often needs work, and families are juggling a lifetime of belongings, out-of-town relatives, and a servicer asking for updates. Showings and a buyer's loan approval can eat up the months you have.
A cash sale is built for that kind of pressure. Tell us about the house, and within 24 hours you get a fair cash offer with the numbers explained line by line, including how the reverse mortgage payoff fits in. We buy the house as-is, belongings and all, so nobody has to spend weekends clearing out closets. Because we pay cash, there's no lender and no appraisal on our side. Once someone has authority to sign and the title is clear, we can close in as little as 10 days, or on a date that lines up with probate and the servicer's deadline.
At closing, the title company requests the official payoff from the servicer, pays the reverse mortgage off directly, and sends what's left to the estate or the heirs. Everybody sees the same numbers on the same settlement statement.
Two honest cautions, wherever you are in DFW:
- A signed contract is great evidence for an extension request, but it doesn't settle the loan by itself. The loan is settled when it's actually paid off at closing, so keep the servicer in the loop until then.
- If the house is underwater and you're relying on the 95 percent rule, the servicer has to sign off on the sale price. Get that approval in writing before closing day.
Quick answers
Do I have to pay off my parent's reverse mortgage myself? Generally no. HECMs are non-recourse, so the loan is tied to the house, not to the heirs personally. If the house sells for less than the balance, FHA insurance covers the shortfall.
How long do heirs have after a reverse mortgage comes due? Heirs generally have about 30 days after the due and payable notice to tell the servicer their plans. HUD's rules then generally allow about 6 months from the date of death to sell or pay off, plus up to two 90-day extensions when you can show real progress.
What is the 95 percent rule? When the house is worth less than what's owed, HUD's HECM rules let the family sell it for at least 95 percent of its current appraised value, and the servicer accepts the sale proceeds as payment in full. Heirs who want to keep the house should confirm their payoff with the servicer in writing.
Can my parent's spouse stay in the house? Sometimes. HUD has protections for an eligible non-borrowing spouse that can delay the loan coming due if certain conditions are met. Check with the servicer and a housing counselor before planning a sale.
Do we need probate before selling? Usually someone needs legal authority to sign the deed, which often means probate or a muniment of title. Filing early also helps when you ask the servicer for more time.
The bottom line
A reverse mortgage doesn't mean the family loses the house's value. It means there's a deadline. Answer the servicer quickly, get someone recognized to sign, keep the taxes and insurance current, and the house can be sold like any other, with the loan paid at closing and the rest going to the family. If you're sorting out a parent's house with a reverse mortgage and want to know what it's worth or how a sale would fit the servicer's timeline, reach out through the form on our home page or start with our inherited house page, and a real local person will call you within 24 hours.
This article is general information about reverse mortgages and inherited homes in Texas, not legal advice. For guidance on your parent's specific loan, estate, or deadlines, talk to a Texas probate attorney or a HUD-approved housing counselor.